Your Long-Term Care Planning KitInformation and tools to start planning today.

Barry and SarahAges 67 and 64

Married and retired with 2 adult

children and 1 grandchild. When

it comes to possibly needing long-

term care, they want no surprises.

OwnYourFutureTexas.org

Welcome! Thanks for the opportunity to guide you through the steps of

long-term care planning.

Long-term care provides a range of services and support that can help you with

health or personal care needs over an extended period. It can supplement services

provided by your family or can take the place of family care.

Planning for your long-term care may seem like a daunting task, but it doesn’t

have to be. You can secure your future by knowing your options, planning wisely,

and taking action. The information and tools in this kit can help you get started.

Remember, it’s your future. Own it!

Contents

What is Long-Term Care? .................................................... 2

Medicare, Medigap, Medicaid, and Long-Term Care: What They Do and Don’t Cover ......................................... 4

Understanding Long-Term Care Insurance ..................... 6

Texas Long-Term Care Partnership-QualifiedPolicies .................................................................................. 11

Is Long-Term Care Insurance Right for You? ............... 13

Worksheet: Determining Whether Long-Term Care Insurance May be Right for You ..................................... 14

The Cost of Long-Term Care ............................................ 16

Worksheet: Paying for Long-Term Expenses ................ 17

Paying for Long-Term Care:What are Your Options? ................................................... 19

Long-Term Care Checklist ................................................ 20

Creating Your ComprehensiveLong-Term Care Plan ......................................................... 22

Comparing Long-Term CareInsurance Policies ............................................................... 24

For More Information and Assistance ........................... 25

1

Long-term care coverage can provide you and your family a more secure future.

The Texas Long-Term Care Partnership was created by the Texas legislature to give Texans like you the information and tools you need to plan for long-term care. The Partnership is a collaborative effort between private long-term care insurance providers, their authorized agents, and state government agencies including the Texas Department of Insurance and the Texas Health and Human Services Commission.

PROTECT YOUR LOVED ONES. 70% OF PEOPLE OVER AGE 65 WILL NEED SOME TYPE OF LONG-TERM CARE.

START PLANNING TODAY.

RETAIN YOUR INDEPENDENCE. RETIRE WITH PEACE OF MIND.

LEARN ABOUT A

PARTNERSHIP-QUALIFIED POLICY.

PROTECT YOUR ASSETS.

2

What is Long-Term Care?

While traditional health-care services focus

on the prevention and treatment of medical

conditions, long-term care services are designed

to help you maintain your current lifestyle as

much as possible at a time when you may not

be able to be fully independent.

You may need long-term care if you:

• develop a prolonged or chronic illness.

• sustain a serious injury or disability.

• develop a cognitive impairment that causes

memory loss or disorientation.

• need to manage issues that come with aging.

Long-term care isn’t just for

older people

Most of us think of long-term care as being

only for older people and those in nursing

homes, but 40 percent of people currently

receiving long-term care services are 64 or

younger. And most people receive long-term

care services either in their own or a family

member’s home, not in a nursing home.

A practical way to determine whether someone

needs long-term care is if he or she needs help

with activities of daily living (ADLs).

These include:

• eating

• bathing

• dressing

• using the toilet

• transferring to or from the bed or a chair

• caring for incontinence

Needs may change over time

For some people, long-term care is a temporary

response to an illness or injury. For others, it

offers protection from the effects of aging.

At first you might need only occasional help for

a few activities of daily living, and may opt to

receive it at home. Over time, however, you may

need more regular assistance and choose to stay

in an assisted living center.

Long-term care can cover different types

of services and supports:

• Skilled care requires a physician-prescribed

plan of care and is provided by medical

personnel, such as a registered nurse or

professional therapist.

• Personal care focuses on helping with

your activities of daily living. It may be

provided by professional caregivers or even

a family member.

• Case management services, which

evaluate and coordinate your overall care.

70% of people

over age 65 will

need some type of

long-term care.

3

MargueriteAge 46

Marguerite and her husband have

always worked on staying healthy

and fit. After a serious accident

three years ago, she knows how

precarious good health can be.

40% of people currently

receiving long-term

care services are 64

or younger.

Marguerite’s 48-year-old husband, Richard, was hiking with his brother when

he skidded on loose rocks and tumbled down a steep slope. His injuries required

multiple surgeries and a stint in a rehabilitation hospital. But that was just the

beginning of his recovery saga.

At home, Marguerite and Richard now had

a steady flow of home health aides and

physical therapists. The daily treatment was

intense — and expensive.

“We got a double shock,” said Marguerite.

“First, the fall — Richard was in great shape and

had hiked on all kinds of terrain for years — and

the magnitude of his injuries. Second, the cost

of having professional home care.”

She adds a third: “We never imagined we’d

be in this situation at such a young age.

Maybe in our 70s or 80s, but not on the cusp

of middle age.”

After several months and with Marguerite’s

help, Richard was finally able to get around and

take care of himself at home. He still needed

occasional home health visits, and it took a couple

more months before he could go back to work.

By that time, Richard and Marguerite had talked

with a financial advisor about long-term care

plans. The advisor referred them to an insurance

agent who provided several options that fit their

life circumstances.

“Given our experience, we didn’t need to

be convinced of the value of long-term care

insurance,” Marguerite says. “We decided on

a policy right away. It’s an investment in our

financial health and our sense of security.

“We never want to go through that again,”

she says, “but we certainly know it could

happen at any age. We breathe easier with

the protection we have today.”

4

Medicare, Medigap, Medicaid, and Long-Term Care: What They Do and Don’t Cover

Despite what many people believe, very few

government programs will help pay your

long-term care expenses, and those that do

have strict eligibility requirements and limits

on what is covered. You should not count on

these programs, health insurance, or disability

insurance to pay for your long-term care.

Medicare. Oftentimes people think Medicare

will cover their long-term care needs. However,

Medicare does not cover it — it pays for short-

term medical expenses based on age and other

qualifications. Medicare is a health insurance

program for people age 65 or older, some

people under age 65, and people of all ages

with end-stage renal disease.

Medigap. Medigap insurance (supplemental

insurance for Medicare) is not intended to meet

long-term care needs either, and provides no

coverage for the vast majority of long-term

care expenses.

Medicaid. Medicaid pays for some long-term

care services, but you must first qualify for it.

Eligibility is based on medical necessity and

financial factors such as income and savings.

If you qualify for Medicaid but have other

health-care coverage, long-term care coverage,

or another party is liable for your medical

expenses, those sources will have to pay your

long-term care claims before Medicaid does.

If you plan to have Medicaid fund your long-

term care, you will first have to “spend down”

resources such as savings and other assets

that can be converted to cash.

In 2017, to qualify for long-term care through

Medicaid:

• You must meet Medicaid income eligibility

based on “countable income” limits.

What’s considered countable income varies

depending on your personal circumstances.

The monthly income limit is $2,205 for a

single person and $4,410 for a couple.

• You must have no more than $2,000 in

“countable resources” for a single person,

or no more than $3,000 for a couple.

• Your home equity cannot exceed $560,000.

• Neither you nor your spouse can transfer

any resources during the 60 months prior to

applying for Medicaid. The block of time these

transfers are prohibited is called the “look-

back period.”

• You must have a “medical necessity”— a

medical condition that requires the type of

care provided in a long-term care facility such

as a nursing home. The medical necessity

designation also allows you to receive

home- and community-based services, but

because demand is high, services may not

be immediately available.

If you do not meet the medical necessity

designation, you may still be able to qualify

for some personal care services that help

with activities of daily living. Though you may

not have to wait for these services, they are

more limited.

5

You should not

count on government

programs, health

insurance, or disability

insurance to pay for your

long-term care needs.

Long-Term Care Service Medicare Private Medigap

Insurance Medicaid

Nursing home care

Pays in full for the first 20 days for approved amounts in a skilled nursing facility, but only after a three-day hospital stay. If you still need skilled care, will pay all but a co-payment of $140/day for days 21-100 per each benefit period.

May cover the $140/day co-payment if your nursing home stay meets all other Medicare requirements.

May pay for care in a Medicaid-certified nursing home if you meet functional and financial eligibility criteria.

Assisted living facility (and similar facility options)

Not covered. Not covered.

Texas Medicaid does not pay for assisted living except through waiver programs, which have limited funding and require a wait period. Financial and functional eligibility requirements must be met.

Continuing care retirement community

Not covered. Not covered. Not covered.

Adult day services Not covered. Not covered.

May cover up to 10 hours per day, 5 days per week. May include nursing and personal care, noon meal and snacks, transportation, and recreational activities. May not be available in all parts of the state.

Home health care

Does not pay if you only need personal care or homemaker services. Covers part-time or intermittent skilled nursing care; home health aide services (if you are receiving skilled nursing care); and some therapies ordered by a Medicare-certified home health agency.

Not covered.

Texas Medicaid may pay for limited services, usually for less than 60 days, or through waiver programs, which have limited funding and require a wait period. Financial and functional eligibility requirements must be met.

Data as of 2017. Medicare and Medigap data provided by longtermcare.gov.

6

Understanding Long-Term Care Insurance

Types of services

Home-based

• Home health care typically includes skilled,

short-term services such as nursing, physical

therapy, or other therapies ordered by a

doctor for a specific condition.

• Personal care services help with basic

activities such as bathing and dressing.

• Homemaker and chore services include

tasks such as meal preparation and routine

household chores. These are sometimes

considered personal care services.

Community-based

• Adult day service programs provide

health, social, and other support services

in a protective setting, typically during

normal business hours.

• Meal programs provide meals in group

settings or delivered to your home.

• Senior centers provide a variety of social

and educational services.

• Transportation services help get you to

and from medical appointments, shopping

centers, and other destinations.

Facility-based

• Assisted living centers provide a community

setting for those who need some assistance

but don’t need the level of care provided by

a nursing home.

• Continuing care retirement communities allow

seniors to remain in the same community

setting by providing accommodations

designed to meet their health and housing

needs, even as these needs change over time.

• Nursing homes and skilled nursing facilities

provide the greatest level of care with a full

range of services.

• Adult foster care provides a place to live,

meals, and 24-hour assistance.

• Board and care homes, also called

residential care facilities or group homes,

provide residents meals, personal care,

and other assistance.

Some policies cover other services such as

hospice care, respite care, in-home care

following a hospital stay, home modifications,

care coordination, or caregiver training for

family members.

Services not covered by long-term

care insurance

Long-term care policies may exclude coverage

for some conditions, either completely or for a

limited time.

Pre-existing conditions

An illness or disability for which you received

medical advice or treatment in the six months

prior to applying for long-term care coverage

may be excluded for up to six months after

the policy’s effective date.

7

Mental health and nervous disorders

Coverage of some mental health and nervous

disorders may be excluded, but the policy must

cover Alzheimer’s disease and other age-related

disorders. However, a company can deny coverage

to a person already suffering from Alzheimer’s.

Care by family members

Most policies will not pay members of your

family to take care of you, though some will

pay to train family members to be caregivers.

Other exclusions

Texas long-term care policies may exclude

coverage for certain conditions resulting from

such things as substance abuse, commission of

a felony, or intentionally self-inflicted injuries.

Talk to your financial advisor or insurance agent

for specifics.

How long-term care insurance works

Getting covered

Long-term care insurance companies will sell

you a policy only if you meet their established

health guidelines, so it makes sense to apply

for coverage when you’re young and healthy.

You’ll be required to answer questions about

your health and health history.

When benefits start

Different policies may have different “benefit

triggers”— conditions that must exist in order

for an insurance company to pay benefits.

For example, a tax-qualified policy will pay

benefits only when you are unable to perform

at least two of six activities of daily living

without substantial assistance for at least 90

days, or have a cognitive impairment, such as

Alzheimer’s. You must also have a plan of care

prescribed by a licensed health-care practitioner.

Non-tax qualified policies may have benefit

triggers that are less restrictive.

When payments start

There is generally a waiting period before a

long-term care policy begins paying for your

care. This is known as the elimination period,

and it begins when your benefits are triggered.

You may have to pay out of pocket for long-term

care services you receive during that time.

The amount of your benefits

When you buy a long-term care policy,

insurance companies let you choose a daily

benefit amount for care in a nursing home,

usually between $50 and $350 per day. If a

policy covers home care, the benefit is usually

a portion of the cost of nursing home care.

Long-term care service costs vary by location.

For information on estimated current and future

costs of services, see page 16.

According to

AARP, the average

length of a nursing

home stay is

approximately

2.5 years.

8

The duration of your benefits

It’s most common for benefits to be paid for

one, two, three, or five years, or for your lifetime.

The lifetime maximum amount for the policy is

usually calculated based on the daily benefit

and the number of years you choose for your

benefit period.

Renewals and cancellations

In Texas, long-term care policies are

“guaranteed renewable.” This means the

company is required to renew your policy each

year unless you misrepresented your health

status in your application, failed to pay your

premiums, or exhausted your benefits.

You can cancel your policy at any time. Check

your policy for how it treats “unearned”

premiums — premiums you paid in advance for

coverage that has not yet been provided.

Premium increases

Companies can raise the premiums on policies

that don’t have fixed rates, but only if they

increase the premiums for everyone in your

“rate class.” As long as you maintain a policy

and pay your premiums, the insurance company

cannot single you out for a rate increase,

regardless of any change in your health or

the number of claims you’ve made.

Policy features

Inflation protection

Even a 3 percent inflation rate can cut the

value of your dollar in half over 25 years.

You should also assume health-care costs will

rise more than the general inflation rate as the

baby boomer generation ages. All long-term

care insurance policies must offer a 5 percent

compound annual inflation protection rider as

an option.

Nonforfeiture benefit

This optional feature guarantees that you

will receive specified benefits even if you

cancel your policy or lose coverage. Generally,

a nonforfeiture benefit will pay up to the total

amount of all premiums paid or 30 times

the daily nursing home benefit at the time

your policy lapsed — whichever is greater.

A nonforfeiture benefit can significantly

increase your premiums. If you decide not

to purchase this option, you must reject

the offer in writing.

Waiver of premium

This feature allows you to stop paying premiums

if you are in a nursing home and receiving

benefits from your long-term care policy.

Companies may waive the premium as soon

as they make the first benefit payment or after

a specified time, usually 60 to 90 days. This

provision may not apply if you are receiving

specified benefits such as home health care

or adult day care.

9

Restoration of benefits

Many policies restore benefits to the original

maximum amounts if you don’t need long-term

care services for a specified period — usually

180 days — after having received them.

Refund of premium

Some companies will offer a benefit that

allows you to have some or all of your premiums

refunded, minus any claims paid. The terms

of this benefit may vary based on age limits,

benefit amount, and other factors.

As with all features, be sure you fully understand

the terms and conditions of what you’re buying.

It is important to talk to a long-term care

specialist so you fully understand what type of

policy is right for you.

Ask your current or former employer if you

are eligible for group long-term care insurance,

savings plan annuities, or similar long-term

care benefits. Or review the Long-Term Care

Checklist on page 20 with your financial planner

or insurance agent to determine whether long-

term care is right for you.

10

RaymondAge 65

Raymond purchased a Texas Long-

Term Care Partnership-qualified

policy when the program launched

in 2009. He knew it would

be advantageous even after his

lifetime coverage ran out.

Being able to keep significant financial assets if he ever needed to apply for

Medicaid to cover long-term care services beyond his insurance limit was a key

factor in Raymond’s choice of a Texas Long-Term Care Partnership-qualified policy.

Raymond purchased a Texas Long-Term Care

Partnership-qualified policy with a value of

$300,000 in benefits. Let’s say he receives all

of the benefit payouts up to the policy’s lifetime

maximum coverage (adjusted for inflation)

equaling $400,000 in value. Eventually he

requires additional long-term care, but since he

has run out of insurance he applies for Medicaid

to cover nursing home services.

If Raymond’s insurance were not a Partnership-

qualified policy, he would have to spend down

most of his countable financial assets, keeping

only the amount allowed by Texas — $2,000,

excluding his home equity (2017 limits) — in

order to qualify for Medicaid.

However, because he bought a Partnership-

qualified policy, his situation would be

very different.

When he applies for Medicaid and is deemed

eligible, he would be able to keep up to

$402,000 in assets (the policy’s lifetime value

plus the state’s standard allowable amount of

$2,000) and still qualify for Medicaid coverage.

“Not having to spend down most of my assets

in order to get Medicaid sealed the deal for

me,” Raymond says. “That’s a unique feature

of a Texas Long-Term Care Partnership-qualified

policy. And there are plenty of insurance carriers

to choose from.”

11

Texas Long-Term Care Partnership-Qualified Policies

Texas Long-Term Care Partnership-qualified

policies offer additional protection of

your assets.

Partnership-qualified policies

Partnership policies are tax-qualified plans that

also include resource and inflation protection.

The resource protection benefit is useful if you

need to apply for Medicaid to pay for long-term

care expenses.

Dollar-for-dollar asset protection

Medicaid will disregard one dollar of your assets

for every dollar of long-term care benefits your

policy pays. This means you can have assets

above the normal eligibility limit and still qualify

for Medicaid. In addition, these assets won’t be

subject to Medicaid liens and recoveries after

you die.

It’s important to note that buying a Partnership-

qualified policy does not automatically qualify

you for Medicaid should you need long-term

care services once your policy runs out. It

does, however, allow you to keep a portion

of your resources even as you are considered

for Medicaid coverage. This dollar-for-dollar

resource protection feature is available only

with Partnership-qualified long-term care

insurance policies.

Inflation protection

Long-term care services are no exception from

rising prices. In fact, the cost for long-term care

services may rise even faster than inflation due

to the high demand for services from the baby

boomer generation. Inflation protection raises

your benefit amounts to pay for increases in

the cost of care. Partnership policies require

different levels of inflation protection based

on your age.

• Age 60 and younger: The insurance company

must offer you the option to buy a 5 percent

compound annual inflation protection benefit.

If you decline the 5 percent offer, the insurance

company must offer you another form of

compound inflation protection, and you

must buy and keep that protection until

you turn 61.

• Age 61 to 75: You must buy and keep some

form of inflation protection until you turn 76.

• Age 76 and older: Companies must offer

inflation protection, but you don’t have to

buy it or keep it.

• If both you and your spouse are purchasing

long-term care insurance, a “shared-care”

or ”joint” policy may give you more coverage

for less money.

The Partnership is a

collaborative effort

between private long-

term care insurance

providers, their

authorized agents,

and state government

agencies including the

Texas Department of

Insurance and the Texas

Health and Human

Services Commission.

12

Tax-qualification

All Partnership-qualified policies are tax-

qualified. This means you may be able to deduct

part of the premium from your taxes as a

medical expense. In addition, the benefits you

receive from a Partnership-qualified long-term

care policy are generally not taxable as income.

For more information on the tax implications of

purchasing a Texas Long-Term Care Partnership-

qualified policy, consult with a tax advisor.

State-to-state coverage

Texas Partnership policyholders who relocate to

another state may be eligible to receive dollar-

for-dollar resource protection, just as they would

if they applied for Medicaid in Texas.

Ask about a Texas Long-Term Care

Partnership-qualified policy

When you’re shopping for a long-term care

policy, be sure to look for a Texas Long-Term

Care Partnership-qualified policy; not all

insurance agents or insurance companies sell

them. All Partnership-qualified policies will be

accompanied by a statement that identifies the

policy as “Texas Long-Term Care Partnership-

qualified.” Only agents who have completed

training required by the Texas Department of

Insurance may sell Partnership-qualified policies.

Where to buy

The Texas Department of Insurance provides

a list of the insurance companies that sell

Texas Long-Term Care Partnership-qualified

policies. For more information, visit

OwnYourFutureTexas.org and click on the

“About the Partnership” tab.

The Partnership

Advantage.

The dollar-for-dollar

resources protection

feature is available

only with Partnership-

qualified long-term care

insurance policies.

13

Is Long-Term Care Insurance Right for You?

Generally, financial planners recommend that

you consider long-term care insurance if you

have all of the following:

• Assets valued at least $75,000 (not including

your car or home).

• Annual retirement income of at least $25,000

to $35,000 for an individual or $35,000 to

$50,000 for a couple.

• Ability to pay the premiums without

financial difficulty, even if the premiums

increase over time.

Long-term care insurance is probably not right

for you if any of the following apply:

• Your only source of retirement income is Social

Security or Supplemental Security Income.

• You would have difficulty paying premiums

if they increase.

• You receive health coverage through Medicaid.

14

Worksheet: Determining Whether Long-Term Care Insurance May Be Right for You

Consider the following factors when deciding about long-term care insurance. You may want to talk to a financial advisor

or long-term care specialist as well.

Personal Considerations

Do you have any current health conditions that may increase your likelihood for needing long-term care?

Yes No

Does your family have a tendency for long life expectancy? Yes No

Is there a history of chronic or debilitating health conditions in your family? Yes No

Is there a history of Alzheimer’s or dementia in your family? Yes No

Have other members of your family required assistance with daily living activities for a period of longer than three months?

Yes No

If you need assistance with daily living activities, will you live at home or elsewhere?

At home Elsewhere

Do you have a spouse, adult children, or other family members who can care for you at your home?

Yes No

Is living independently important to you? Yes No

Is leaving an inheritance important to you? Yes No

Is making your own long-term care choices important to you? Yes No

Financial Considerations

What is your annual income? $

How do you expect your income to change over the next 10 years? No change Increase Decrease

Who will control your finances in the event you or your spouse cannot?

Not counting your home, how much are all of your assets worth?Under $30,000 $50,000 to $75,000

$30,000 to $50,000 Over $75,000

Do you have enough resources to justify the expense of a long-term care policy? Yes No

How do you expect your resources to change in the next 10 years? No change Increase Decrease

Are you concerned that the financial resources you need to pay for your long-term care costs may not be available when you need them?

Yes No

Do you want to finance your long-term care using several assets? Yes No

How will you pay your long-term care insurance premiums? Income Savings/investments

Will your family contribute anything toward your long-term care insurance premiums?

Yes No

Can you afford the policy if premiums increase, for example, by 20%? Yes No

Will you be able to afford the policy if your income decreases? Yes No

Are you planning to retire in the next 5 to 15 years? Yes No

If so, how will retirement impact your ability to pay your premiums? No impact Minor impact Major impact

Barry and SarahAges 67 and 64

So far, retirement has been

surprisingly fun for Sarah and

Barry. But when it comes to

possibly needing long-term care,

they want no surprises.

15

Having found each other later in life, Barry and Sarah wanted to make the most

of their time together. The active, retired Austin couple enjoys traveling, attending

The University of Texas Longhorns events, playing tennis, and spending time with

their large, blended family.

While Sarah and Barry’s working lives are over,

their kids are still building their careers, paying

for mortgages, and saving for their own kids’

college costs. The last thing the couple wanted

was to have their children become responsible

for long-term care expenses should either of

them have an accident or illness that required

extended care.

So, they got serious about exploring how to

protect their financial future and that of their

kids with long-term care insurance. “It’s a

subject most of us want to put off, but we

decided we had to be realistic and not just

hope nothing will happen,” says Barry.

He and Sarah consulted with an insurance agent

about long-term care policies. An aha moment

came when the agent noted that most people

don’t think twice about insuring an expensive

boat but don’t stop to think about protecting

their family’s financial assets. “We’ve got

savings,” Barry says, “but we learned the cost

of long-term care could burn through our money

pretty fast.”

Purchasing a policy took away a big worry.

“The price is reasonable considering the

premium for one year is close to the amount our

policy would pay out each month for personal

care at home or in a nursing facility,” Sarah

says. “That’s the kind of investment that simply

makes good sense.”

16

The Cost of Long-Term Care

Costs to consider

Long-term care costs have been growing faster than all other health-care costs over the last 50 years, and that trend is

expected to continue. Ask about inflation protection as part of your policy.

What are the costs of various long-term care options?

Level of care monthly cost options. 2017 and 2032 projects figures for Texas*

Home

Community

Facility

Care location options.

*Long-term care costs compiled by Genworth Financial. www.genworth.com/about-us/industry-expertise/cost-of-care.html**2015 costs provided by senior living centers and compiled by SeniorHomes.com. 2030 costs are based on average cost increases projected for long-term care.www.seniorhomes.com/p/alzheimers-care-costs

ASSISTED LIVING FACILITY $0K

2032

2017

$2K $4K $8K$6K $10K $12K

$3,620

$5,641

PERSONAL CARE AT HOME $0K

2032

2017

$2K $4K $8K$6K $10K $12K

$3,721

$5,798

NURSING HOME (SEMI-PRIVATE) $0K

2032

2017

$2K $4K $8K$6K $10K $12K

$4,637

$7,224

SKILLED CARE AT HOME $0K

2032

2017

$2K $4K $8K$6K $10K $12K

$3,732

$5,814

NURSING HOME (PRIVATE) $0K

2032

2017

$2K $4K $8K$6K $10K $12K

$6,109

$9,518

ADULT DAY HEALTH CARE $0K

2032

2017

$2K $4K $8K$6K $10K $12K

$736

$1,147

MEMORY CARE**$0K

2030

2015

$2K $4K $8K$6K $10K $12K

$4,520

$7,042

Costs are based on monthly estimates.

17

Worksheet: Paying for Long-Term Care Expenses

There are a number of ways to fund your long-term care plan, including long-term care insurance,

savings plan annuities, certain life insurance policies, or home equity. Use this worksheet to help guide

your planning process. This tool is for guidance only; for a complete overview that answers all of your

questions, consult with a financial planning professional.

Anticipated resources available for long-term care expenses

Personal savings $

Life insurance benefit $

Annuity contracts $

Home equityStocks and bondsSocial Security

$

Other funding sources $

Total resources available $

18

BarbaraAge 51

Barbara has always been a planner.

Many of her friends wish they

shared that habit. She’s been able

to avoid some of life’s hazards

that they have not by recognizing the

importance of long-term care.

Independence is as important to Barbara as good health. She’s single, with no children,

just like her favorite aunt, Pat. And she’s used to calling the shots in both her

professional and her personal life. The planner in her helps her call the right shots.

Barbara has loved being a nurse administrator.

But after 25 years in nursing, she’s thinking

about the next phase of her career. “Advancing

to the hospital’s leadership would be a coup,”

she says.

Barbara is also thinking about what might

happen if, all of a sudden, her good health

turned bad. Then calling the shots could be

harder. She sees that with patients regularly.

And Aunt Pat’s experience with long-term care

after suffering a severe stroke was a huge

eye-opener.

Instead of seeing her money run out like Aunt

Pat’s did, Barbara wanted to protect the assets

she’s worked so long to build. Always the

planner, she consulted with her insurance agent

about a long-term care insurance policy. He

gave her all the information she needed about

plans that fit her needs and her budget, and she

chose what she felt was the best match.

“Selecting an insurance company with stability

and a good reputation was an important

consideration,” Barbara says. “Locking in a

competitive premium was also a big factor.

It’s an expense you don’t like to think about,

but it’s worth it for peace of mind.”

Barbara’s friends, all around the same age, have

started to follow her lead in planning for long-

term care. Losing everything is surely one hazard

they want to avoid.

On average, women

outlive men by

about five years and

women need long-term

care twice as long

as men do.

19

Paying for Long-Term Care: What Are Your Options?

Now that you’ve thought about your long-term

care options and how much your care may

cost, you can assess how to best plan for those

expenses. Your options may include paying out

of pocket; buying long-term care insurance;

or using your home equity, life insurance, or

annuity contracts. Your plan will depend on

your age, health considerations, and priorities,

and a financial planner or insurance agent

who specializes in long-term care can help

you decide what works best for you. Although

long-term care insurance may seem like a big

investment now, its benefits can far outweigh

its cost. The key is to start planning now so

you can better control your future care.

Personal income and savings. You may

be able to pay for your long-term care services

out of pocket. However, this could divert

resources from covering other expenses, such

as your spouse’s living arrangements. Consider,

too, that at the time you need long-term care,

you may not have a source of income other

than your savings.

Long-term care insurance. Long-term care

insurance policies can be customized so you can

get the services you need in the settings that

suit you best. You can also purchase a Texas

Long-Term Care Partnership-qualified policy

that provides benefits, features, and consumer

protections. For more information on Partnership

policies, please see page 11.

Home equity. By the time you need long-term

care, you may have significantly reduced or paid

off your home mortgage, or your home value

may have appreciated. If so, you have several

ways you can use that equity to pay for long-

term care. Options to consider include:

• selling your home

• sale-leaseback

• reverse mortgage

• conventional home equity loan

• home equity conversions

• reverse annuity mortgage

• home modification loans

Life insurance. You may be able to use

your life insurance policy to help pay for long-

term care. Talk to your agent about policies

with accelerated death benefits or a long-term

care rider.

Annuity contracts. Some annuity contracts

allow you to withdraw money without a penalty

to pay for long-term care services. If you have

an annuity, you may want to see if your contract

includes this option or a long-term care rider.

20

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Long-Term Care Checklist

Long-Term Care Checklist:What to Discuss With Your Financial Planner and/or Insurance AgentHere is a list of topics to cover with a financial planner as part of your long-term care planning. If you are considering long-term care

insurance, be sure to ask about Texas Long-Term Care Partnership-qualified coverage. These policies provide feature benefits, and

consumer protections that are not available with other long-term care policies. Partnership-qualified policies can be sold only by licensed

agents who have completed training required by the Texas Department of Insurance.

Te x a s H e a l t h a n d H u m a n S e r v i c e s 07/17

What to discuss with your financial planner and/or insurance agent

Here is a list of topics to cover with a financial planner and/or insurance agent as part of your long-term care planning. If you’re

considering long-term care insurance, be sure to ask about Texas Long-Term Care (LTC) Partnership-qualified coverage. These

policies provide dollar-for-dollar resources protection not available with other long-term care policies. Partnership-qualified

policies can be sold only by licensed agents who have completed training required by the Texas Department of Insurance.

Questions for a Financial Planner

Considering my age and health, how much long-term care am I likely to need? How much is it likely to cost?

How can my savings and assets contribute to my long-term care plan?

Can my life insurance or annuity be used to fund long-term care services?

What financial and legal documents are needed to complete my plan?

Based on projected costs, is long-term care insurance or an LTC Partnership-qualified policy a good way to cover my spouse and me? How would long-term care insurance affect my overall financial plan?

Questions for an Insurance Agent

Do I qualify for long-term care insurance or an LTC Partnership-qualified policy?

What is the difference between a Partnership-qualified policy and a non-Partnership-qualified policy? Which one best suits my needs?

How could long-term care insurance or an LTC Partnership-qualified policy supplement my existing insurance coverage?

Are you licensed and have you completed the state’s required training to sell Partnership-qualified long-term care policies?

What is the cost of long-term care insurance or an LTC Partnership-qualified policy?

What services are covered?

What is an elimination period?

Within 30 Days of Purchase

What would my premium be? Is it a fixed-rate premium? If it’s not a fixed-rate, what kind of rate increase can I expect?

I have 30 days to review my long-term care policy to see if it has the right benefits and features I want, correct?

If I cancel the policy before the end of the 30-day review period, will I get a full refund of any premium I paid?

21

PaulAge 34

Paul and his young family live

in Portland, far from his mom

and dad in Fort Worth — too far

for him to travel home frequently

if his parents needed help with

daily care.

Along with

addressing issues you

may have later in life,

long-term care insurance

can provide another

benefit: peace of mind

for you and your family.

Both of Paul’s parents had been primary caregivers for their aging parents,

and they knew the strain it puts on family. But they put off thinking about their

own long-term care plans until Paul was home for Thanksgiving a few years ago.

Paul was the one who brought up the issue of

long-term care planning with his mom and dad

during his visit home.

“We all acknowledged that they couldn’t rely on

family because we live too far away,” Paul says.

“But even if we were closer, they understood

the ripple effect of stress created by caring for

someone with a long-term condition, not to

mention the costs. They didn’t want to put that

load on us.”

Paul’s parents were relieved to have settled

what could be a sensitive issue, and after a

thorough discussion with their insurance agent,

they bought a long-term care insurance policy.

Paul thought it would be a long time before

either of them might need to use it. However,

peace of mind came immediately. As it turned

out, Paul’s father was only 63 when he was

diagnosed with a serious neurological disorder.

“Recently Dad got to the point that Mom

would have had to quit her job and stay home

with him,” says Paul. “So, he started drawing

on his long-term care benefits. With the

professional services he’s getting, he may

well be able to get around on his own at

some point.”

The situation is reassuring to the entire family.

“He has choices,” Paul says. “The fact that

Dad’s not being driven by what he and Mom

can’t afford is huge. It makes a big difference

to him, and to all of us.”

22

Creating Your Comprehensive Long-Term Care Plan

To create a long-term care plan that’s

comprehensive, consider the following:

Personal planningFFMaintain your health.

Regular checkups and screenings along

with healthy eating, physical activity, mental

stimulation, and other care are important in

maintaining health and independence.

FFTalk with your family about caregiving.

It’s estimated that individuals turning 65 today

could need up to three years of long-term care

services, with almost two years of that care

provided at home. Do you have family and/or

friends who can care for you if you become ill

or disabled for an extended period?

FFGet familiar with local resources.

The time to learn about long-term care services

and resources in your area is well before you

may need them. Visit local facilities and talk to

them about their services and costs so you can

know your options ahead of time. For a list of

helpful resources, see page 25.

Financial planningFFReview your current coverage.

To confirm what your current policies cover,

talk to your insurance advisor or employer’s

benefits counselor.

FFDecide if you can — or want — to pay

out of pocket for long-term care.

If you were to opt out of buying long-term care

insurance, consider the financial resources you

have and how you feel about using them to pay

for long-term care. These could include income

sources such as Social Security, pension, interest,

dividends from investments, or payments from

a 401(k) or IRA as well as savings, stocks and

bonds, and assets such as your home.

FFLook for other resources that may

cover your long-term care expenses.

Consider all your financing options, including

long-term care insurance. Review these options

carefully to make sure you understand all the

details, eligibility requirements, and costs.

HousingFFConsider whether you’d live in

your current home or elsewhere.

If you’re like most people, you plan to stay

in your own home for as long as possible.

Some important things to consider include the

condition of your home and how much it will

cost to maintain, how accessible your home

would be if you become less independent, the

cost of modifications if you need them, and the

availability of long-term care support services

in the area.

23

If you decide to move, look for design and

accessibility features that can accommodate

being less independent. Consider a single-level

house, accessible condominium or apartment,

or a retirement community that provides

support services such as transportation and

housekeeping. Before you decide to move,

also consider your home’s value, how much

equity you have, the potential advantages of

buying versus renting, the related tax and legal

issues, and whether yours will be a short- or

long-term move.

Advance care and legal planningFFMake a plan of advance care.

Decide what types of care you want to receive

in an emergency or when facing end-of-life

situations. You should consider your options

while you have time to think through them

clearly, and then discuss your preferences with

your family and those close to you. Making your

wishes clear ahead of time decreases the chance

of future conflicts and takes the decision-

making burden off your family. Your plan should

reflect your personal values and beliefs, and be

adaptable if circumstances change.

Assemble legal documents

In general, you’ll need two types of legal

documents. A medical power of attorney

appoints a specific person to make health-

care decisions for you at any time you’re

unable to do so for yourself. In the event you

become unable to speak for yourself, a living

will provides written instructions for your care,

including the extent to which you wish to

receive life-sustaining medical treatments.

24

Worksheet: Comparing Long-Term Care Insurance Policies

If you decide long-term care insurance is right for you, use this worksheet to compare policies. Make sure you buy from

a reliable company that is licensed by the Texas Department of Insurance to sell long-term care insurance. For a list of

companies offering Partnership-qualified policies, visit tdi.texas.gov/consumer/hicap/partnershipcomp.html.

Policy 1 Policy 2 Policy 3

Company Information

Company name

Telephone number

Financial rating

Consumer complaint index

Company licensed in Texas (yes or no)

Number of years in business

Policy form number

Number of years selling policy form

Premium Amounts

Premium without riders and discounts $ $ $

Premium with home health care $ $ $

Premium with inflation protection $ $ $

Premium with nonforfeiture benefit $ $ $

Premium for optional rider

Discounts you qualify for % % %

Premium with riders and discounts $ $ $

Benefits the Policy Provides

Years of coverage provided

Total lifetime benefit

Pre-existing condition wait period (yes or no)

Benefits adjusted for inflation protection (yes or no)

Tax-qualified policy (yes or no)

Services the Policy Provides

Nursing home care (yes or no)

Assisted living facility care (yes or no)

Home health care (yes or no)

Daily and Monthly Policy Limits Daily Monthly Daily Monthly Daily Monthly

Nursing home care $ $ $ $ $ $

Assisted living facility care $ $ $ $ $ $

Home health care/adult day care $ $ $ $ $ $

Elimination Periods (list number of days for each)

Nursing home care

Home health care

25

For More Information and Assistance

Visit OwnYourFutureTexas.org to find

additional information and links to these resources.

Long-term care informationNational Clearinghouse for Long-Term

Care Information

longtermcare.gov

202-619-0724

AARP

1-888-OUR-AARP (1-888-687-2277)

aarp.org

Texas Medicaid program informationTexas Health and Human Services Commission

hhs.texas.gov

Dial 2-1-1

Medicare informationmedicare.gov

1-800-Medicare (1-800-633-4227)

Services for those who are aging or have a disability, and their caregivers

Local Area Agencies on Aging (AAA)dads.state.tx.us/contact/aaa.cfm

1-800-252-9240

Administration on Agingusa.gov/federal-agencies/administration-on-aging

202-619-0724

Eldercare Locatoreldercare.gov

1-800-677-1116

Family Caregiver Alliancecaregiver.org

1-800-445-8106

Long-term care for federal employees and annuitantsThe Federal Long Term Care Insurance Programltcfeds.com

Legal rights and consumer protection informationConsumer Rights and Services Hotline1-800-458-9858

Texas Department of Insurancewww.tdi.state.tx.us

1-800-252-3439

Texas Legal Services Centertlsc.org

1-800-622-2520

Citations include: longtermcare.gov; AARP; American Association for Long-Term Care Insurance; and TDI.

OwnYourFutureTexas.org